A record number of retail stores closed this year, capping off a decade of dramatic changes to consumer preferences as a result of online shopping that roiled the industry.
Retailers announced more than 9,300 store closures this year, a 63 percent increase from 2018, when more than 5,700 stores closed, according to Coresight Research, a global advisory and research firm specializing in retail and technology. The last record year came in 2017, when more than 8,000 stores shuttered.
But some retail analysts say the industry was due for trimming after a decadeslong mall boom that followed consumers into the suburbs. After World War II, the economy heated up and consumers left urban areas to buy new homes in the suburbs. Retail developers quickly followed by opening up a new mall every year. At their peak, 19 new malls opened in 1990.
“Not every retailer needs 100 stores. It’s about the industry right-sizing, rather than about a retail apocalypse.”
“Even without the advent of online, there would be this reckoning,” Michael Brown, a retail practice partner with the global management consulting firm A.T. Kearny, told NBC News. “What online has done is make it really expensive to continue operating a large store base, and with a competitive online experience there had to be a rationalization for the number of stores and the role they played.”
This year’s record number of store closures has touched nearly every part of the retail industry, from apparel to toys, and was driven in part by a slew of company bankruptcies. For many of these companies, bankruptcy and store closures are an opportunity to right size their store footprints and shed expensive real estate.
Payless ShoeSource filed for bankruptcy in February for the second time and shut down all 2,500 of its North American stores. The company struggled with massive debt and said supplier delays forced it to sell its inventory at deep discounts. Teen retailer Charlotte Russe also filed for bankruptcy, and said it would close 94 stores. North American fashion house YM bought the company in March and plans to relaunch 100 new locations across the country. Barneys New York plans to close 15 out of its 22 stores as part of its bankruptcy. Its new owner, Authentic Brands, plans to open a pop-up shop in the summer of 2020 on Madison Avenue in New York City to give the company “an opportunity to attract a new customer that they don’t necessarily have today,” said Jamie Salter, CEO of Authentic Brands.
Read more about the record level of retail store closings on the NBCNews.com website HERE